The total cash dividends that will be distributed to preferred and common stockholders over the two years, assuming cumulative, is $176,500.
The preferred stock has a par value of $10 per share and a dividend rate of 9%. This means that each share of preferred stock is entitled to a dividend of $0.90 per year. In 2020, the company declared and paid $30,000 of cash dividends. This is not enough to cover the full dividend of $45,000 that is owed to the preferred stockholders, so the preferred stockholders will receive a $0.60 per share dividend in 2021. The common stock has a par value of $15 per share and no dividend rate. This means that the common stockholders are not entitled to any dividends unless the preferred stockholders have been paid their full dividend.
In 2020, the company declared and paid $30,000 of cash dividends. This was enough to cover the full dividend of $45,000 that is owed to the preferred stockholders, so the common stockholders received no dividends.
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Assume a bond pays $1000 in one year and has an interest rate of 25%. Given this information, we know that the bond's price must be: $800.00 $750.00 $250. $583.33. $140.00
Assuming a bond pays $1000 in one year and has an interest rate of 25% the bond's price must be - A) $800.00.
A bond paying $1000 in one year and with an interest rate of 25% indicates that the bond's price must be calculated by discounting the future cash flow to its present value.
Hence, the bond's price can be calculated using the present value formula, which is expressed as
P = FV / (1 + r)n
where: P = bond price
FV = future value of the bond, which is $1000
n = number of periods, which is 1
r = interest rate, which is 25% or 0.25
Substituting the values into the formula above:
P = $1000 / (1 + 0.25)1P
= $1000 / 1.25P
= $800
Therefore, the bond's price is $800.00.
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Robert $100 if Robert collects his mail and waters his yard while he is away. Robert does not respond, but collects John’s mail and waters John’s yard while John is away. Which of the following is applicable to a claim by Robert
to collect the $100?
A.Robert cannot collect because he is a minor who lacks legal capacity.
B.Robert cannot collect because this type of agreement must be in writing.
c. Robert cannot collect because he never communicated acceptance of the offer.
d.Robert can collect because he performed in accordance with the offer (and the offer called for performance and not communication of acceptance).
Robert can collect the $100 because he has completed his part of the contract.
The answer is d. Robert can collect because he performed in accordance with the offer (and the offer called for performance and not communication of acceptance)
A claim by Robert to collect the $100 is applicable because Robert collected John’s mail and waters John’s yard while John was away.
Therefore, Robert performed in accordance with the offer, which stated that he would collect his mail and water his yard while he was away. Because Robert has completed the action mentioned in the offer, he can collect the $100, and it is a legally enforceable contract.
In addition, the contract does not require communication of acceptance because the content is loaded in the contract and Robert's performance signifies his acceptance of the offer.
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After all expenses have been subtracted from revenues on an income statement, the final figure or bottom line is called the _____ when it is a positive number.
After all expenses have been subtracted from revenues on an income statement, the final figure or bottom line is called the "profit" when it is a positive number.
The profit is the money that is earned from the operation of a company after all costs, expenses, and taxes have been paid. It is the difference between revenue and expenses, with revenue being the amount of money brought in by the company and expenses being the costs incurred in generating that revenue. Profit is considered a positive number when the revenue earned is higher than the costs incurred.
Expenses are the costs incurred by a company to produce goods or services. These costs are subtracted from the revenue earned to determine the profit or loss for the company. Examples of expenses include rent, utilities, salaries and wages, and the cost of raw materials.Bottom lineThe bottom line is the final figure or result on an income statement, which shows the company's net profit or loss for the period being reported. It is called the bottom line because it appears at the end of the income statement and represents the final figure after all revenues and expenses have been accounted for.
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Let if be a risk-free rate of 2% denominated in U.S dollars. Let i, be a promised interest rate on Greek bonds of 20%. With a probability of 0.5, the greek government defaults next period, which gives a return ia of -10%. (1) What is the expected return on Greek bonds, assuming that Greek bonds are U.S dollar denominated. (2) What is the sovereign spread of Greek bonds? (3) What is the risk-premium of Greek bonds ?
(1) To calculate the expected return on Greek bonds, we need to consider the returns based on their respective probabilities.
The expected return (ER) can be calculated using the following formula:
ER = Probability1 * Return1 + Probability2 * Return2
In this case, we have two possible returns:
Return1: ia = -10% (if the Greek government defaults)
Return2: i = 20% (if the Greek government does not default)
The respective probabilities are:
Probability1: 0.5 (default probability)
Probability2: 1 - Probability1 = 0.5 (non-default probability)
Using the formula, we can calculate the expected return as follows:
ER = (0.5 * (-10%)) + (0.5 * 20%)
= (-5%) + (10%)
= 5%
Therefore, the expected return on Greek bonds, assuming they are U.S dollar denominated, is 5%.
(2) The sovereign spread of Greek bonds represents the additional yield or interest rate premium investors demand to hold Greek bonds compared to risk-free U.S dollar-denominated bonds. It reflects the perceived credit risk associated with Greek bonds.
To calculate the sovereign spread, we subtract the risk-free rate from the promised interest rate on Greek bonds:
Sovereign Spread = i - if
= 20% - 2%
= 18%
Therefore, the sovereign spread of Greek bonds is 18%.
(3) The risk premium of Greek bonds represents the compensation investors receive for bearing the additional risk associated with holding Greek bonds compared to risk-free U.S dollar-denominated bonds. It reflects the excess return earned above the risk-free rate.
To calculate the risk premium, we subtract the risk-free rate from the expected return on Greek bonds:
Risk Premium = ER - if
= 5% - 2%
= 3%
Therefore, the risk premium of Greek bonds is 3%.
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ILLUSTRATION 28. Jhin Trading Co. Ltd. has an authorised Capital of $ 8,0 10.000 6% Preference Shares of $ 10 each; 20.000 7% Preference Shares of $ 10 each; and 15.000 Equity Shares of $ 10 each. On January 1, 2007, the whole of the two classes of preference shares and 15,000 of the equity shares stood in the books as fully paid. The securities premium account as on that date showed a balance of $ 20,000. The balance of profit was $ 32,000. On July 1, 2007 it was decided to deem the whole of 6% preference shares at a premium of $ 1 per share and for this specific purpose, the company issued for cash 8,000 equity shares of $. 10 each at a premium of $ 2 per share, payable full on allotment. All the above shares were taken up. The cost of issue of shares amounted to $3,000. On October 1 the company issued to existing shareholders one bonus share of $. 10 fully paid for each five shares held. It is the intention of the directors that minimum reduction should be made in revenue reserve account which stood at $. 1,25,000. Give necessary Journal entries.
Authorized capital of $ 8,0 10,000 consists of the following:6% Preference Shares of $ 10 each20,000 7% Preference Shares of $ 10 each 15,000 Equity Shares of $ 10 each.
On January 1, 2007, the two classes of preference shares and 15,000 of the equity shares stood in the books as fully paid.Balance of profit on that date was $ 32,000.The securities premium account on that date showed a balance of $ 20,000.On July 1, 2007, it was decided to deem the whole of 6% preference shares at a premium of $ 1 per share.8,000 equity shares of $.
10 each were issued at a premium of $ 2 per share. Cost of issue of shares amounted to $3,000.On October 1, 2007, the company issued to existing shareholders one bonus share of $. 10 fully paid for each five shares held.The revenue reserve account stood at $. 1,25,000.It is the intention of the directors that the minimum reduction should be made in the revenue reserve account.
Journal Entries are as follows:On January 1, 2007:(a) Entry for issue of 20,000 7% Preference Shares of $ 10 each with a premium of $ 1 per share to bring the total amount of preference shares at par: Authorized Capital A/c Dr. $ 20,000To 20,000 7% Pref. Shares A/c $ 2,00,000To Securities Premium A/c $ 20,000
(b) Entry for issue of 6% Preference Shares of $ 10 each fully paid: Authorized Capital A/c Dr. $ 6,00,000To 6% Pref. Shares A/c $ 6,00,000
(c) Entry for issue of 15,000 Equity Shares of $ 10 each fully paid:Authorized Capital A/c Dr. $ 1,50,000To Equity Shares A/c $ 1,50,000
(d) Entry for Profit:Profit and Loss A/c Dr. $ 32,000
To Balance Carried Down $ 32,000On July 1, 2007:
(e) Entry for the issue of 6% Preference Shares at a premium of $ 1 per share: 6% Pref. Shares A/c Dr. $ 60,000To Securities Premium A/c $ 60,000(f) Entry for the issue of Equity Shares:Bank A/c Dr. $ 96,000To Equity Shares A/c $ 80,000To Securities Premium A/c $ 16,000Cost of issue $ 3,000 to be shown as deduction from Securities Premium A/cOn October 1, 2007:
(g) Entry for Bonus Issue: Bonus Shares A/c Dr. $ 3,000To Equity Shares A/c $ 3,000
(h) Entry for transfer of revenue reserve account: Balance Carried Down Dr. $ 1,25,000
To Revenue Reserve A/c $ 1,25,000
(i) Entry for reduction in securities premium account: Security Premium A/c Dr. $ 3,000
To Balance Carried Down $ 3,000
Note: Balance Carried Down indicates the transfer of balance from one accounting year to the next year. The Balance Carried Down is shown on the credit side of the Profit and Loss account and the debit side of the Balance Sheet.
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Bahrain Company makes snow blowers. It has two departments that process all products: Assembly and testing. The following dlats pertain to the Assebly depunet. Direct materials are added at the beginning of the process and conversion costs are uniformly incurred. The degree of completion of conversion follow At the beginning of September, work in process is 40% complete and at the end of the mooth work in process is not complete. Other data for the months incloe Beginning work in process inventory 3,200 units Units started 4,000 units Units completed 6,400 units Ending work-in-process inventory $400,000 Conversion costs for September $520,000 Direct materials cost for September Beginning work-in-process costs: Materials $308,000 Conversion $164,160 ASUS VivoBook Remaining Time: 1 heur, 45 minutes, 55 seconds. Question Completion Status 105 Question 12 11 12 points Bahrain Company makes snow blowers. It has two departments that process all productic Assembly and Leining. The following data pertain to Amy departe. Direct materials are added at the beginning of the process and conversion costs are unifamily incered. The degree of completion of comes fellows At the beginning of September, work in process is 40% complete and at the end of the month work in process is 60% complete. Other data for the south incl Beginning work-in-process inventory 3.200 units 4,000 units Units started Units completed 6,400 units Ending work-in-process inventory Conversion costs for September $400.000 Direct materials cost for September $520,000 Beginning work-in-process costs: Materials $308,000 Conversion $164,160 ASUS VivoBook $164,160 Required: a) Prepare a production cost schedule for the Assembly Department at the end of September using the weighted average method of process conting (maks) b) Prepare the necessary journal entries
a) Equivalent units of production for direct materials = (3,200 units + 4,000 units) x 100%. Hence, Equivalent units of production for direct materials = 7,200 units Equivalent Units of Production for Direct Materials: Beginning work-in-process units: 3,200 units (40% complete),Units started: 4,000 units ,Total units accounted for: 7,200 units.
Equivalent units of production for direct materials = (Beginning work-in-process units + Units started) x Percentage of completion. Equivalent Units of Production for Conversion Costs: Beginning work-in-process units: 3,200 units (40% complete), Units started: 4,000 units ,Total units accounted for: 7,200 units. Equivalent units of production for conversion costs = (Beginning work-in-process units + Units started) x Percentage of completion. Equivalent units of production for conversion costs = (3,200 units + 4,000 units) x 100%. Hene, Equivalent units of production for conversion costs = 7,200 units .
Production Cost Schedule for the Assembly Department - Weighted Average Method:
Direct Materials Conversion Costs
Equivalent Units of Production 7,200 7,200
Cost per Equivalent Unit
Beginning work-in-process costs:
Materials $308,000 $164,160
Conversion $164,160 $164,160
Cost per equivalent unit = (Beginning work-in-process costs / Equivalent units of production)
Cost per equivalent unit (Materials) = $308,000 / 7,200 units ,Cost per equivalent unit (Conversion) = $164,160 / 7,200 units. Total Costs Incurred Direct materials cost for September = $520,000,
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Question 1 (5 Marks) Durlio PPE SDN BHD, a melt blown fabric and mask manufacturer in Malaysia is planning to introduce their new products; a 4-ply face mask with multi-color and customized printing design and N95 rated respirator face masks to the market. As a business analyst, you are required to help the company to calculate the combination of quantity for both products to be produce and sell to get the maximum profit. The Linear Programming model is as follows: S = quantity of 4-ply face mask, T = quantity of N95 respiratory face masks Max Z = 6S + 4T subject to: 5S + 7T ≤ 35 (constraint equation for polypropylene material in meter) 2S + 5T ≤ 60 (constraint equation for labor in hours) S, T > 0 i.
What is the method that can be used to solve the above problem? (2 marks). ii. Develop a standardized linear programming model for the above problem (3 marks).
The method used to solve the given problem is Linear Programming. The standardized linear programming model is developed to maximize profit based on the quantity of 4-ply face masks and N95 respiratory face masks produced and sold.
Linear Programming is the method employed to solve the problem at hand. It is a mathematical technique used to determine the best possible outcome in a situation with multiple constraints. The objective is to maximize profit by finding the optimal combination of quantities for the 4-ply face masks (S) and N95 respiratory face masks (T) produced and sold.
The standardized linear programming model for this problem is as follows:
Maximize Z = 6S + 4T
Subject to:
5S + 7T ≤ 35 (constraint equation for polypropylene material in meters)
2S + 5T ≤ 60 (constraint equation for labor in hours)
S, T > 0
The objective function (Z) represents the profit, which is maximized. The constraints represent the limitations on the availability of polypropylene material and labor. The inequalities ensure that the quantities of masks produced do not exceed the given constraints. To find the optimal solution, the linear programming model can be solved using various techniques such as the graphical method, simplex method, or software tools specifically designed for linear programming. The solution will provide the ideal quantities of 4-ply face masks and N95 respiratory face masks to be produced and sold in order to maximize profit while respecting the given constraints.
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TRA Corp's 2021 income statement listed net sales of $14 million, EBIT of $7.5 million, net income of $5.4 million, and dividends of $2.5 million. The 2021 year-end balance sheet listed total debt of $58 million and equity of $32 million with 2.0 million shares outstanding. What is the corporation's ROA (Return on Assets)? O 5.9 percent 6.0 percent O 7.7 percent O 8.1 percent
The corporation's Return on Assets (ROA) is 8.1 percent.
ROA is calculated by dividing the net income by the average total assets. We can find the average total assets by taking the average of the beginning and ending total assets.
Net income = $5.4 million
Average Total Assets = [tex]\(\frac{\text{Beginning Total Assets} + \text{Ending Total Assets}}{2}\)[/tex]
To calculate the beginning and ending total assets, we need to consider the balance sheet information. However, the beginning total assets are not provided. Therefore, we will assume that the beginning and ending total assets are the same.
Total Debt = $58 million
Equity = $32 million
Total Assets = Total Debt + Equity
Total Assets = $58 million + $32 million = $90 million
Average Total Assets = [tex]\(\frac{90 million + 90 million}{2}\) = $90 million[/tex]
ROA = [tex]\(\left(\frac{\text{Net Income}}{\text{Average Total Assets}}\right) \times 100\)[/tex]
ROA = [tex]\(\left(\frac{$5.4 million}{$90 million}\right) \times 100\)) = 6 percent[/tex]
Therefore, the corporation's ROA is 6.0 percent.
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strategic plan business memo to covince a CEO to purchase JC
PENNEY that is out of business. (please do analysis)
The strategic plan business memo aims to convince the CEO to consider purchasing JCPenney, despite being out of business.
I am writing this strategic plan business memo to present a compelling case for the acquisition of JC Penney, despite its current status as an out-of-business company. While it may seem unconventional to consider acquiring a company that has faced significant challenges, this strategic move can provide numerous benefits and strategic opportunities for our organization.
Firstly, acquiring JCPenney would give us access to an established brand with a rich history and a loyal customer base. By leveraging this brand equity, we can tap into a vast market segment and expand our customer reach. Additionally, we would gain valuable physical retail locations, which can serve as strategic assets for future initiatives such as experiential retail concepts or omnichannel strategies.
Furthermore, acquiring JCPenney would provide us with a valuable opportunity to acquire their assets at a favorable cost. This includes their inventory, real estate holdings, and potentially even their intellectual property. We can unlock significant value and generate new revenue streams by repurposing or revitalizing these assets.
In conclusion, acquiring JCPenney presents a unique strategic opportunity for our organization. It allows us to leverage an established brand, gain valuable physical assets, and unlock potential value. By carefully considering this acquisition and implementing a well-defined integration plan, we can position ourselves for long-term growth and success.
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Choose whether each item below is reported in:
the statement of financial position
profit or loss in the statement of profit or loss and other comprehensive income
other comprehensive income in the statement of profit or loss and other comprehensive income
the statement of changes in equity
the notes to the financial statements.
Non-adjusting events …
Transfer from asset revaluation surplus to retained earnings …
Finance costs …
Deferred tax asset …
Gain on revaluation of equipment - OCI …
Non-adjusting events and Finance costs are reported in Profit or loss in the statement of profit or loss and other comprehensive income. Transfer from asset revaluation surplus to retained earnings is reported in the statement of changes in equity.
Deferred tax asset is reported in the statement of financial position. Gain on revaluation of equipment - OCI is reported in other comprehensive income in the statement of profit or loss and other comprehensive income. Statement of financial position:
The statement of financial position shows the financial position of the business at a given point in time. Profit or loss in the statement of profit or loss and other comprehensive income: The profit and loss statement presents a business's earnings, losses, and expenses over a given period of time (such as a quarter or year).Other comprehensive income in the statement of profit or loss and other comprehensive income:
Other comprehensive income consists of income, gains, losses, and expenses that are not included in profit or loss. The statement of changes in equity: The statement of changes in equity provides a comprehensive summary of changes in equity over a certain period of time. Notes to the financial statements: The notes to the financial statements offer additional detail on the data contained in the financial statements.
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Explain why companies report negative net cash flows from investing activities. Should they be concerned about this situation? Include in your explanation the importance of other sources of cash flows and an example of a company with negative net cash flows from investing. (150 words)
Companies report negative net cash flows from investing activities due to strategic investments for future growth, and they should not be concerned if they have other sources of cash flows or if these investments generate long-term value.
Companies report negative net cash flows from investing activities when they spend more on long-term assets such as property, plant, and equipment, and investments in other companies than they receive from selling them. This negative net cash flow can be due to strategic investments for future growth, such as research and development, mergers and acquisitions, or capital expenditures. Companies should not necessarily be concerned about this situation if they have other sources of cash flows, such as positive net cash flows from operating activities or financing activities that can fund their investments, or if these investments are expected to generate long-term value for the company.
For example, Amazon reported negative net cash flows from investing activities in 2020, primarily due to its investments in property and equipment, including the expansion of its fulfillment centers and data centers. However, Amazon also reported positive net cash flows from operating activities and financing activities, which helped fund these investments. These investments are expected to support the company's future growth and expansion, which is a key part of Amazon's business strategy.
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Suppose you recently sold your used car. Assume that no new production was involved in this transaction.
Wealth was created because the buyer's willingness to pay was (EQUAL TO GREATER THAN, LESS THAN) the value of your willingness to sell.
Suppose you sold the car for $26,000.
If the minimum price, or "bottom line," you would accept for the car is $15,000 and the most the buyer is willing to pay is $37,000, then the seller surplus is $______ and the buyer surplus is $______. The total surplus created by the transaction is $_______.
The seller surplus is $11,000, and the buyer surplus is $11,000. The total surplus created by the transaction is $22,000.
Seller surplus refers to the difference between the price at which the seller is willing to sell the item and the actual selling price. In this case, the seller's willingness to sell the car was $15,000, and the car was sold for $26,000. Therefore, the seller surplus is $26,000 - $15,000 = $11,000.
Buyer surplus, on the other hand, represents the difference between the maximum price the buyer is willing to pay and the actual selling price. Here, the buyer's willingness to pay for the car was $37,000, but they only had to pay $26,000. Hence, the buyer surplus is $37,000 - $26,000 = $11,000.
Total surplus is the sum of seller surplus and buyer surplus, which in this case is $11,000 + $11,000 = $22,000. It represents the overall benefit gained by both the buyer and the seller from the transaction.
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Mr. Greenfield has provided you the following information for his second line of business (Barbering services for men) for the year ended 31 December 2020.
- Cash sales $240,000
- Rent $36,000
- Salaries- $72,000
- Miscellaneous Expenses- $24,000
- Rates- 2300
i. Prepare an Income Statement for BG Enterprises (Barbering Services) for the year ended December 31, 2019. (8 marks)
ii. Comment on the profitability of this line of business. (2 marks)
iii. Identify THREE ways in which Mr. Greenfield his business and one advantage of doing so. (4 marks)
Income statement for BG Enterprises (Barbering Services) for the year ended December 31, 2019. To prepare the income statement, we need to have the sales revenue and the operating expenses that include the costs of goods sold (COGS), wages and salaries, rent, utilities, and other expenses.
The income statement is one of the crucial financial statements, which indicates a company's profitability, revenues, and expenses over a particular period. Mr. Greenfield provided the following information for his second line of business (Barbering services for men) for the year ended December 31, 2020. Cash sales- $240,000Rent- $36,000Salaries- $72,000Miscellaneous Expenses- $24,000Rates- 2300We have to prepare the income statement for the year ended December 31, 2019. To prepare the income statement, we need to have the sales revenue and the operating expenses that include the costs of goods sold (COGS), wages and salaries, rent, utilities, and other expenses.
Let us assume that there is no information available about COGS, and the business follows the accrual accounting method. Sales Revenue=$240,000Expenses:Rent= $36,000Salaries= $72,000Miscellaneous Expenses= $24,000Rates= $2300Total Expenses= $136,300Net Income = $240,000 - $136,300= $103,700Therefore, the income statement for BG Enterprises (Barbering Services) for the year ended December 31, 2019, is as follows:Income Statement for the year ended December 31, 2019ParticularsAmount ($)Sales Revenue240,000Less: ExpensesRent36,000Salaries72,000Miscellaneous Expenses24,000Rates2,300Total Expenses=136,300Net Income=240,000-136,300=103,700The profitability of this line of business:-Mr. Greenfield's barbering services for men line of business is profitable because the net income for the year ended December 31, 2019, is $103,700, which is positive. Hence, the profitability of the barbering services for men line of business is good.Identify THREE ways in which Mr. Greenfield can expand his business and one advantage of doing so:-Mr. Greenfield can use the following three ways to expand his business:1) Establish an online presence and incorporate online booking and e-commerce options. This could lead to an increase in customers, additional revenue, and also provide a competitive advantage.2) Starting a loyalty program that would reward customers for coming back to the store. This could help in retaining customers and increasing sales.3) Building a partnership with other businesses, which will help the business in cross-promotion and also open up new avenues for growth.One advantage of doing so is that the business would have the opportunity to reach a new customer base, and revenue can increase as the customer base increases.
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Question 13 In consumer choice theory, when economists refer to the happiness, satisfaction, or pleasure derived from a purchase, they use the term O avail O advantage
O consumer benefit O utility Question 14 Marginal Utility is the O extra satisfaction received from consuming one more unit of a product. O total satisfaction received from consuming a given number of units a product. O average satisfaction received from consuming a product. O satisfaction received when consumers have had enough of a product.
Question 13:In consumer choice theory, when economists refer to the happiness, satisfaction, or pleasure derived from a purchase, they use the term utility.The term utility is used by economists when they refer to the happiness, satisfaction, or pleasure derived from a purchase.
It is the satisfaction or the usefulness that a consumer derives from consuming a good or service. It measures the level of satisfaction that a consumer derives from the consumption of a good or service.
Marginal Utility is the extra satisfaction received from consuming one more unit of a product.Marginal Utility refers to the additional satisfaction or usefulness that a consumer derives from consuming one more unit of a product.
It is the change in total utility or satisfaction that a consumer derives from consuming one more unit of a good or service.
In other words, it measures the additional satisfaction that a consumer gains from consuming one more unit of a good or service.
Marginal Utility can be positive, negative, or zero. It is positive when the additional unit consumed increases the total utility, negative when the additional unit consumed decreases the total utility, and zero when the additional unit consumed does not change the total utility.
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Anderson Motors, Inc. has just set the company dividend policy at $0.30 per year. The company plans to be in business forever. What is the price of this stock if a. an investor wants a return of 5%? b. an investor wants a return of 7%? c. an investor wants a return of 9%? d. an investor wants a return of 16%? e. an investor wants a return of 18%?
The stock's price would be:
a. $6.00
b. $4.29
c. $3.33
d. $1.88
e. $1.67
To calculate the price of the stock based on the desired investor return, we can use the Gordon growth model (dividend discount model) assuming a constant growth rate.
The formula for the Gordon growth model is as follows:
Stock Price = Dividend / (Required Return - Dividend Growth Rate)
Given:
Dividend = $0.30 per year
Dividend Growth Rate = 0% (since the company plans to maintain the same dividend forever)
a. For a required return of 5%:
Required Return = 5% = 0.05 (expressed as a decimal)
Stock Price = $0.30 / (0.05 - 0) = $0.30 / 0.05 = $6.00
b. For a required return of 7%:
Required Return = 7% = 0.07 (expressed as a decimal)
Stock Price = $0.30 / (0.07 - 0) = $0.30 / 0.07 = $4.29
c. For a required return of 9%:
Required Return = 9% = 0.09 (expressed as a decimal)
Stock Price = $0.30 / (0.09 - 0) = $0.30 / 0.09 = $3.33
d. For a required return of 16%:
Required Return = 16% = 0.16 (expressed as a decimal)
Stock Price = $0.30 / (0.16 - 0) = $0.30 / 0.16 = $1.88
e. For a required return of 18%:
Required Return = 18% = 0.18 (expressed as a decimal)
Stock Price = $0.30 / (0.18 - 0) = $0.30 / 0.18 = $1.67
Therefore, the stock's price would be:
a. $6.00
b. $4.29
c. $3.33
d. $1.88
e. $1.67.
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Most economist agree that individual labor supply between $40 and $80 and hour is O cyclical. inelastic. O fixed in place. O elastic.
Option (b), Individual labor supply between $40 and $80 an hour is inelastic.
The term inelastic refers to the amount of demand or supply when there is no significant effect on the quantity when the price of a product or service changes. So, when individual labor supply is inelastic, it means that there is no change in the amount of labor supply if the wages increase or decrease in the market. Hence, the statement that "individual labor supply between $40 and $80 an hour is inelastic" is a fact that most economists agree with.
The other options that were provided as answer choices are not correct. If the labor supply were cyclical, it would have fluctuated with business cycles. If the labor supply were fixed in place, then it would not have changed even when the market wage rate increases. If the labor supply were elastic, then any small change in the wage rate would lead to a significant change in the quantity of labor supplied, which is not the case with an inelastic labor supply.
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For the major report, you must select ONE of these industry categories. You then select ONE company operating in this industry. I encourage you to consider a company operating in Australia.
You research the macro forces which may affect the industry and also any micro forces pertinent to the company.
Analyse the industry and company in terms of macro and micro forces.
You can select some macro or specific micro forces may be more relevant to YOUR industry and YOUR company.
Look at whether the company is responding to these or anticipating these changes. You can conclude and give a recommendation/s on what the company needs to do based on your earlier report and research.
CHOOSEN CATEGORY: PET FOOD (DOG FOOD)
You can elect to do one element WITHIN a category for instance dog food only with the pet food option. While some macro forces may be global, do not try to cover different activities of the company in different countries, this is too complex. Just focus on the ONE country in this case Australia.
The focus on this assignment if you view the marking guidelines - relates to determining through research the major forces affecting the category or industry, and any micro elements specific to the company. You can then analyse if the company is responding to these forces - in some instances the company may already have adjusted and taken into account these elements. In some instances, you may perceive the company has under-estimated or not accounted for these forces in its behaviour. It is best to analyse the last year or two - do not be going back five years as things change too much.
You finish off after the conclusion with some recommendations. It may be the company should continue responding as it has; it may be the company needs to address an issue you have highlighted.
NEED INFOMATION REGARDING THESE HEADINGS:
Industry overview
Key macro forces
Overview of key micro forces that affect the company
What the company is doing to respond and anticipate these micro forces
Conclusion
Recommendations what the company could do better or may need to adresss
Industry overview: The pet food industry in Australia has experienced significant growth in recent years due to increasing pet ownership and the growing trend of pet owners treating their pets as family members.
The demand for pet food, particularly dog food, has been driven by factors such as rising disposable incomes, urbanization, and a shift towards premium and organic pet food options. The industry is highly competitive, with both domestic and international players vying for market share.
Key macro forces: Economic factors: Changes in consumer spending patterns, inflation rates, and economic conditions can impact the demand for pet food products.
Demographic factors: The size and composition of the pet-owning population, as well as trends in pet ownership and pet humanization, play a significant role in shaping the industry.
Regulatory environment: Compliance with food safety regulations, labeling requirements, and animal welfare standards are crucial for companies operating in the pet food industry.
Environmental factors: Increasing awareness of sustainability and eco-friendly practices may influence consumer preferences for pet food products.
Overview of key micro forces affecting the company: Competitive landscape: The company faces competition from both established players and new entrants offering a range of dog food products.
Consumer preferences: Changing consumer preferences towards natural, organic, and premium pet food products may impact the company's product portfolio and marketing strategies.
Distribution channels: The company's distribution network and relationships with retailers, online platforms, and veterinary clinics influence its market reach and sales.
What the company is doing to respond and anticipate these micro forces: The company has been proactive in addressing changing consumer preferences by introducing new product lines that cater to natural and organic dog food options. It has also invested in marketing campaigns highlighting the nutritional benefits of its products and leveraging social media platforms to engage with pet owners. Additionally, the company has collaborated with key distribution partners to expand its reach and ensure availability across various channels.
Conclusion: The company has demonstrated a good understanding of the micro forces impacting the industry and has taken steps to respond to these changes. Its focus on product innovation, marketing, and distribution partnerships aligns with evolving consumer preferences.
Recommendations: To further enhance its position in the market, the company could consider:
Conducting regular market research to stay updated on emerging trends and consumer preferences.
Exploring opportunities for partnerships with veterinary clinics and pet care professionals to strengthen its credibility and reach.
Investing in sustainable packaging and environmentally friendly practices to align with the growing demand for eco-conscious pet food products.
Continuously monitoring and adapting its product portfolio to meet changing consumer demands and preferences.
Leveraging digital marketing strategies and e-commerce platforms to expand its online presence and reach a wider customer base.
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Holding everything else constant, if the government engages in deficit spending during an economic expansion:
A) government savings will increase
B) the equilibrium interest rate in the loanable funds market will rise
C) the equilibrium interest rate in the loanable funds market will fall.
D) private investment spending will increase
Deficit spending refers to when the government spends more money than they receive from taxes. Holding everything else constant, if the government engages in deficit spending during an economic expansion, the equilibrium interest rate in the loanable funds market will fall.
Private investment spending will increase. Deficit spending during economic expansion Deficit spending means the government is incurring debt. It's necessary to note that the government might deficit spend during periods of economic expansion if they think it will assist in sustaining the growth in the long run. Holding everything else constant means that the factors of loanable funds market other than government spending, inflation rate, and the position of the business cycle are the same.
In effect, higher deficit spending increases the supply of loanable funds. As a result, it leads to the reduction of the interest rate because more funds are available for borrowers in the market. Private investment spending will also increase since people will be willing to borrow and invest in their businesses .Moreover, the equilibrium interest rate in the loanable funds market will fall.
Therefore, holding everything else constant, if the government engages in deficit spending during an economic expansion, the equilibrium interest rate in the loanable funds market will fall, and private investment spending will increase.
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The most accepted method for classifying consumer goods and services is based on consumer buying behavior. This method divides consumer goods and services into four general categories: convenience, shopping, specialty, and unsought. This exercise provides some general examples of products found in each category. Select the most appropriate category for each good or service listed. 1. Appliances convenience shopping specialty unsought 2. Automobile battery jumpstart services convenience shopping specialty unsought 3. Cemetery plots convenience shopping specialty unsought 4. Clothes convenience shopping specialty 5. Expensive wine convenience shopping specialty unsought 6. Gas convenience shopping specialty unsought 7. Jewelry convenience shopping specialty unsought 8. Milk convenience shopping specialty unsought
1. Appliances – Convenience2. Automobile battery jumpstart services – Unsought3. Cemetery plots – Unsought4. Clothes – Shopping5. Expensive wine – Specialty6. Gas – Convenience7. Jewelry – Specialty8. Milk – Convenience. Consumer goods and services are classified into four general categories based on consumer buying behavior, which is the most widely accepted method.
The four categories are convenience, shopping, specialty, and unsought. Following are the most appropriate categories for each good or service listed:1. Appliances – Convenience2. Automobile battery jumpstart services – Unsought3. Cemetery plots – Unsought4. Clothes – Shopping5. Expensive wine – Specialty6. Gas – Convenience7. Jewelry – Specialty8. Milk – Convenience The convenience products are products that the consumer purchases frequently, without much thought, and with little comparison shopping. Milk and gas are examples of convenience products.
The shopping products are products that require comparison shopping because they are usually more expensive and less frequently purchased. Clothes are the example of shopping products. Specialty products are products with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort. Jewelry and expensive wine are the examples of specialty products.The unsought products are products that the consumer does not know about or does not consider buying until they have a need for them. Automobile battery jumpstart services and cemetery plots are the examples of unsought products. Consumer goods and services are divided into four general categories based on consumer buying behavior, which is the most widely accepted method. The four categories are convenience, shopping, specialty, and unsought. Let's explore each category:1. Convenience Products: These products are frequently purchased by consumers without much thought and little comparison shopping. Convenience products are usually inexpensive, and consumers generally don't spend a lot of time or effort on them. Examples of convenience products include milk, bread, gasoline, candy, and other products that can be found in a local store.2. Shopping Products: These products are usually more expensive and less frequently purchased than convenience products. Shopping products require comparison shopping because consumers want to ensure that they get the best value for their money. Examples of shopping products include clothes, furniture, cars, and other items that consumers buy less frequently and are more expensive than convenience products.3. Specialty Products: These products are unique, and consumers are willing to make a special purchase effort to buy them. Specialty products are usually more expensive than other products, and they have unique characteristics or brand identification. Examples of specialty products include expensive wines, jewelry, and other luxury items.4. Unsought Products: These products are not usually on the consumers' minds or considered buying until they have a need for them. Unsought products are often difficult to sell because consumers don't know about them or don't see the need for them. Examples of unsought products include funeral services, insurance, and other products that consumers don't think about until they need them.In conclusion, consumer goods and services are classified into four general categories based on consumer buying behavior. The four categories are convenience, shopping, specialty, and unsought. Each category has its unique characteristics, and businesses must understand these categories to develop effective marketing strategies.
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How useful are codes of conduct in helping managers make ethical decisions across culture?
Codes of conduct can be useful tools in helping managers make ethical decisions across different cultures.
Here are a few reasons why:
1. Establishing common ethical standards: Codes of conduct provide a set of principles and guidelines that establish a common ethical framework for managers to follow. They outline expected behaviors and help managers navigate ethical dilemmas consistently, regardless of cultural differences.
2. Promoting awareness and understanding: Codes of conduct often address cultural sensitivities and provide guidance on how to navigate diverse cultural contexts. They raise awareness among managers about potential ethical challenges they may face when operating in different cultures and encourage them to approach situations with cultural understanding and respect.
3. Providing a reference point for decision-making: Codes of conduct serve as a reference point for managers when facing ethical dilemmas. They provide clarity on the organization's values, ethical standards, and expectations. Managers can refer to the code to guide their decision-making process and ensure that their actions align with the organization's ethical principles.
4. Facilitating dialogue and discussion: Codes of conduct can stimulate discussions and dialogue among managers from different cultural backgrounds. They provide a common language and framework for discussing ethical issues and help bridge cultural gaps by fostering understanding and mutual respect. Managers can share their perspectives, learn from each other, and collectively work towards ethical decision-making.
However, it's important to note that codes of conduct alone may not be sufficient in addressing all ethical challenges across cultures. They should be complemented by ongoing training, education, and open communication channels to ensure managers have a deep understanding of ethical considerations specific to different cultures. Additionally, organizations should foster a supportive culture that encourages ethical behavior and provides resources for managers to seek guidance and clarification when faced with complex ethical dilemmas.
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an example of a keystone firm within a business ecosystem is
An example of a keystone firm within a business ecosystem is a company that holds significant influence and power, acting as a central player that impacts the operations and success of other firms in the ecosystem.
A keystone firm is a company that plays a critical role in a business ecosystem, often acting as a key enabler or driving force for the success of other firms within the ecosystem. This firm holds a central position and has a significant impact on the operations and dynamics of the entire ecosystem.
For example, in the technology industry, a keystone firm could be a dominant software platform that serves as a foundation for various applications and services developed by other firms. This platform creates an ecosystem where developers, app providers, and users rely on its infrastructure and tools. The keystone firm sets the standards, provides technical support, and attracts customers, which in turn drives the success and growth of the other firms operating within its ecosystem.
The influence of a keystone firm extends beyond its own operations, as it has the ability to shape market trends, set pricing structures, and dictate terms of engagement with other firms. Its strategic decisions and actions can have ripple effects throughout the entire ecosystem, making it a critical player that significantly impacts the success and sustainability of other businesses within the ecosystem.
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McQuade was the manager of the New York Giants baseball team. McQuade and John McGraw purchased shares in the National Exhibition Co., the corporation that owned the Giants, from Charles Stoneham, who owned a majority of National Exhibition’s stock. As part of the transaction, each of the three agreed to use his best efforts to ensure that the others continued as directors and officers of the organization. Stoneham and McGraw, however, subsequently failed to use their best efforts to ensure that McQuade continued as the treasurer and a director of the corporation, and McQuade sued to compel specific performance of the agreement.
Is it ethical to put the business judgment of the directors ahead of an otherwise valid promise they made?
How can directors perform the tasks dictated to them if their judgment is constrained by earlier agreements with some of the shareholders?
The ethical dilemma arises when directors prioritize their business judgment over valid promises made in a contractual agreement.
Ethically, directors have a fiduciary duty to act in the best interests of the corporation and its shareholders. While contractual agreements, such as the one between McQuade, Stoneham, and McGraw, are important and should be upheld, the directors must also consider the long-term well-being of the corporation.
This means that directors should have the freedom to exercise their business judgment and make decisions that they believe are in the best interests of the company, even if it means deviating from earlier agreements.
Directors play a crucial role in managing and overseeing the operations of the corporation, and their decisions should be based on their expertise and assessment of the company's needs and circumstances. If their judgment is constrained by prior agreements, it may limit their ability to make decisions that are in the best interests of the corporation. This can hinder their effectiveness in performing their tasks and fulfilling their fiduciary duties.
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a) If fixed costs are 15 and the variable costs are 22 per unit, (1) Write down expressions for total cost (TC), average cost (AC) and marginal cost (MC). (9 Marks) (ii) Find the value of Q which minimizes AC and verify that AC = MC at this point.
Answer: MC = ΔTC/ΔQMC = 22
the value of Q that minimizes AC is approximately 23.32.
Given that the fixed costs are 15 and the variable costs are 22 per unit. Let us find the expressions for total cost (TC), average cost (AC) and marginal cost (MC).(i) Expressions for total cost (TC), average cost (AC) and marginal cost (MC):Total Cost (TC):It is the sum of the fixed cost and variable cost per unit. It can be expressed asTC = Fixed Cost + (Variable Cost x Quantity)
TC = 15 + 22Q
Average Cost (AC):It is the cost per unit and can be expressed as
AC = Total Cost/Quantity
AC = (15 + 22Q)/QAC = 15/Q + 22
Marginal Cost (MC):It is the additional cost of producing one more unit and can be expressed as
MC = ΔTC/ΔQMC = 22
(ii) To minimize the average cost (AC), we take the derivative of the average cost (AC) with respect to Q, equate it to zero, and find the value of Q that makes the derivative zero. We can use this value to show that the AC = MC at that point.Average Cost
(AC) = (15 + 22Q)/Q = 15/Q + 22
Differentiating AC with respect to Q:
AC = 15/Q + 22d(AC)/d
Q = -15/Q^2d(AC)/dQ + 22 = 0-15/Q^2 + 22 = 0-15 = -22Q^2Q^2 = 15/22Q = √(15/22)
We can substitute this value of Q into the expression for the marginal cost (MC) and the average cost (AC) and compare them.
MC = ΔTC/ΔQ = 22AC = 15/Q + 22 = 15/(√(15/22)) + 22 = 23.32
Since AC = MC at the point, we can conclude that the value of Q that minimizes AC is approximately 23.32.
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The Nash Equilibrium of a non co-operative game , as in the example of the 'Prisoners' Dilemma' is based on maximization of a player's self-interest, given the strategies of the other players. The statement is :
Select one:
True
False
True. The Nash Equilibrium of a non-cooperative game, such as the Prisoners' Dilemma, is based on the assumption that each player maximizes their own self-interest given the strategies of the other players.
In the Prisoners' Dilemma, for example, both players have an incentive to betray each other to minimize their own potential punishment, leading to a suboptimal outcome for both. The Nash Equilibrium captures the stable outcome where no player has an incentive to unilaterally deviate from their chosen strategy.
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the maximum interest rate a lender can charge under an arm is called what?
The maximum interest rate a lender can charge under an ARM is called the lifetime cap. When it comes to an adjustable-rate mortgage (ARM), the interest rate on your loan can fluctuate over time.
Lenders usually use an index to determine how much the rate will change at each adjustment, and then add a margin to that index rate. ARM loans have rate caps, which are limits on how much the interest rate can change during the life of the loan.There are three types of rate caps: initial, periodic, and lifetime. The initial rate cap limits how much the rate can change on the first adjustment, while the periodic rate cap limits how much it can change on subsequent adjustments. Finally, the lifetime cap limits how much the rate can increase over the life of the loan.The lifetime cap is the maximum interest rate a lender can charge under an ARM. It is typically a high percentage rate, but it ensures that the borrower's monthly payment will not become too expensive to afford, which is one of the advantages of an ARM. As a result, it is critical to understand the lifetime cap on an ARM when evaluating mortgage options.
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You are named as head of the breast cancer prevention section of the US Centers for Disease Control and Prevention (www.cdc.gov (Links to an external site.)). What primary and secondary prevention programs would you favor to reduce the incidence of and mortality from breast cancer? Please be specific and use at least two resources to develop your recommendations.
Breast cancer is a disease that affects both women and men. The main goal of the prevention section of the US Centers for Disease Control and Prevention (CDC) is to lower the incidence and mortality of breast cancer.
There are different primary and secondary prevention programs that are favored to reduce the incidence of and mortality from breast cancer. Some of them are given below:Primary prevention programThere are several ways that can be employed for primary prevention of breast cancer. Some of them are:Environmental exposures: To reduce exposure to environmental carcinogens, one can avoid unnecessary radiation exposure and pollution. Furthermore, environmental exposures to other harmful toxins should also be avoided.Lifestyle modifications: It is necessary to maintain a healthy weight, follow a healthy diet, engage in regular physical activity, and reduce alcohol consumption. These lifestyle changes can help to decrease the risk of breast cancer.Genetic counseling: People who are at high risk of developing breast cancer can seek genetic counseling and testing.Secondary prevention programSecondary prevention involves detecting the cancer early, thereby reducing the morbidity and mortality rate. Screening tests are a part of secondary prevention. Some of the secondary prevention programs are:Mammography: Mammography is a low-dose X-ray that can detect breast cancer early and is recommended for women over 50 years old.Clinical breast exam (CBE): It is a physical examination of the breasts by a healthcare professional. The frequency of CBE can vary based on the individual's risk factors and age.Magnetic resonance imaging (MRI): MRI can be used for screening in women at high risk of developing breast cancer, as well as in women who have a history of breast cancer.Resources for developing recommendationsThe American Cancer Society (www.cancer.org (Links to an external site.)) and the National Cancer Institute (www.cancer.gov (Links to an external site.)) are two reputable sources that provide detailed information on breast cancer prevention programs. They also provide information on breast cancer risk factors, symptoms, treatment options, and support for those affected by breast cancer.
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Explain how information systems in supply chains create competitive advantages for organizations.
Information systems in supply chains can create competitive advantages for organizations by enhancing efficiency, improving decision-making, and enabling effective coordination among various stakeholders.
These systems provide real-time visibility into inventory levels, production processes, and customer demands, enabling organizations to optimize their operations and reduce costs.
By analyzing data from these systems, organizations can identify patterns, trends, and opportunities for improvement, leading to better strategic planning and resource allocation. Moreover, information systems facilitate collaboration and information sharing among supply chain partners, fostering seamless communication and coordination. This integration leads to faster response times, improved customer service, and a streamlined supply chain, giving organizations a competitive edge in terms of agility, responsiveness, and overall performance.
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How to calculate cash realizable value of the receivables if accounts receivable has credit balance?
CK Inc. had net sales in 2020 of $800,000. At Dec. 31, 2020, the following information was listed which was about the balances in selected accounts before adjusting entries:
Accounts receivable credit balance: $150, 000
Allowance for doubtful accounts debit balance: $1,500
Estimated uncollectable receivable: 2% of net sales
Q1. At Dec. 31, 2020, on the CK Inc.’s statement of financial position, what is the cash realizable value of the receivables?
At December 31, 2020, the cash realizable value of receivables for CK Inc. would be $748,500. This value is obtained by subtracting the credit balance of accounts receivable ($150,000) and the debit balance of the allowance for doubtful accounts ($1,500) from the net sales ($800,000).
The cash realizable value of receivables represents the amount CK Inc. expects to collect from its customers after accounting for estimated uncollectible receivables. In this case, the estimated uncollectible receivable is determined as 2% of net sales, which amounts to $16,000. To calculate the cash realizable value, the credit balance of accounts receivable and the debit balance of the allowance for doubtful accounts are subtracted from the net sales. This adjustment reflects the amount that is realistically expected to be collected in cash, providing a more accurate representation of CK Inc.'s financial position. Therefore, the cash realizable value of the receivables at December 31, 2020, is $748,500.
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Consider two firms engaging in sequential Stackelberg competition. Suppose firm 1 decides its quantity x₁ first and firms 2 follows after observing X₁. The demand function of the market is x(p) = 100 -0.1p and the cost function for both firms is c(x) = FC + 5x² a. Suppose first that FC = 0. Derive firm 2's best response function to observing firm 1's output level x₁. b. What output level will firm 1 choose? c. What output level does that imply firm 2 will choose? d. What is the equilibrium Stackelberg price? e. Now suppose FC is not zero. What is the lowest FC at which firm 1 does not have to engage in strategic entry deterrence in order to keep firm 2 out of the market?
a. To derive firm 2's best response function, we need to find the profit-maximizing quantity for firm 2 given firm 1's output level, x₁. The profit function for firm 2 is given by:
π₂(x₂) = (100 - 0.1(p(x₁, x₂))) * x₂ - c(x₂)
First, let's find the price as a function of x₁ and x₂. The market demand function is given by x(p) = 100 - 0.1p. Rearranging this equation, we can solve for p:
p(x) = 1000 - 10x
Substituting x₁ and x₂ into the price equation, we have:
p(x₁, x₂) = 1000 - 10x₁ - 10x₂
Now we can write firm 2's profit function as:
π₂(x₂) = (100 - 0.1(1000 - 10x₁ - 10x₂)) * x₂ - c(x₂)
To find the best response, we maximize this profit function with respect to x₂. Take the derivative of π₂(x₂) with respect to x₂ and set it equal to zero to find the maximum:
dπ₂(x₂)/dx₂ = (100 - 0.1(1000 - 10x₁ - 10x₂)) - 0.1x₂ = 0
100 - 0.1(1000 - 10x₁ - 10x₂) - 0.1x₂ = 0
100 - 100 + x₁ + 2x₂ - 0.1x₂ = 0
x₁ + 1.9x₂ = 0.1x₂
x₁ = -0.9x₂
Therefore, firm 2's best response function is:
x₂ = -0.526x₁
b. Firm 1, being the leader, will choose the quantity that maximizes its own profit. Since there is no fixed cost (FC = 0), firm 1's profit-maximizing quantity is where marginal cost equals marginal revenue. The marginal cost is given by the derivative of the cost function:
MC = d(c(x₁))/dx₁ = d(5x₁²)/dx₁ = 10x₁
The market price can be found by substituting firm 1's quantity into the demand function:
p = 100 - 0.1x₁
Setting marginal cost equal to marginal revenue:
MC = MR
10x₁ = 0.1(100 - 0.1x₁)
10x₁ = 10 - 0.01x₁
10.01x₁ = 10
x₁ = 1
Therefore, firm 1 will choose an output level of x₁ = 1.
c. Firm 2's output level is determined by firm 1's choice. Substituting x₁ = 1 into the best response function:
x₂ = -0.526(1)
x₂ = -0.526
Therefore, firm 2 will choose an output level of x₂ = -0.526.
d. The equilibrium Stackelberg price can be found by substituting the output levels of both firms into the demand function:
p = 100 - 0.1x
p = 100 - 0.1(1 + (-0.526))
p = 100 - 0.1 + 0.0526
p = 99.9526
Therefore, the equilibrium Stackelberg price is approximately $99.95.
e. To find the lowest FC at which firm 1 does not have to engage in strategic entry deterrence, we need to consider the case where firm 2's best response is to not enter the market. In this case, firm 2's quantity would be zero.
Substituting x₂ = 0 into firm 1's best response function: x₁ = -0.9(0)
x₁ = 0
Therefore, firm 1 does not have to engage in strategic entry deterrence (keep firm 2 out of the market) when its quantity is zero.
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English question
what is circular reasoning fallacy. Please give at least 4 simple examples.
Please explain each example by mentioning how this fallacy relate to each examples.
Please do not forget to mention the role of this fallacy in each example.
Thank you so much
Circular reasoning fallacy is a logical fallacy in which the argument assumes what it is trying to prove. This fallacy is also called begging the question, circular logic, or circular argument.
The argument may seem valid, but it doesn't provide any new information to support the claim.Here are four simple examples of circular reasoning fallacy:1. "I am a genius because I am extremely intelligent."Role: This argument assumes that being extremely intelligent makes someone a genius, and being a genius is due to being extremely intelligent.2. "This book is popular because it is the bestseller."Role: This argument assumes that the book is popular because it is a bestseller, and the book is a bestseller because it is popular.3. "God exists because the Bible says so, and the Bible is true because it is the word of God."Role: This argument assumes that the Bible is true because God says so, and God exists because the Bible says so.4. "Paranormal activity is real because I have experienced what can only be described as paranormal activity."
Role: This argument assumes that the paranormal activity is real because the person has experienced it, and the person has experienced paranormal activity because it is real.
The role of circular reasoning in each example is that the argument is based on a premise that has already been assumed to be true without providing any new information to support it. It is a fallacy because it doesn't prove or support anything, and it only perpetuates the belief that was already held by the person making the argument.
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